CPL Ltd v CPLl Opco (Trinidad) Ltd & Anor

On summary judgment, the court must ask whether the claim has no real prospect of success. Issues depending on disputed witness evidence, intention to create legal relations, or evaluation of documents will generally be unsuitable for summary determination. An entire agreement clause must be construed according to its terms and context. It does not necessarily prevent a collateral agreement concerning obligations left outside the written contract. A promise that a parent company will assume primary liability is legally distinct from a guarantee and is not subject to the writing requirement applicable to guarantees. The evidence need only show a real prospect of establishing primary liability at trial.

The claimant operated a Twenty20 cricket league and contracted with the first defendant to operate a Trinidad and Tobago team. The second defendant owned the first defendant’s holding company. The claimant alleged that the second defendant made an oral promise to assume primary liability for the first defendant’s obligations and that a collateral contract resulted.

The second defendant sought summary judgment. It relied on an entire agreement clause in a share purchase agreement, the alleged vagueness of the claimant’s witness evidence, disclosed documents concerning a proposed parent company guarantee, and Statute of Frauds 1677. The central question was whether the claimant’s case had no real prospect of success.

1. The application for summary judgment was dismissed. The court had previously held that the claim against the second defendant had a real prospect of success, and the subsequent evidence did not make the claim unsustainable.

2. The proper construction of the entire agreement clause could be decided summarily, but the factual question whether the draft participation agreement formed part of the share purchase agreement had to be left to the trial judge. The clause was not properly construed as extending to the draft agreement. The participation agreement did not impose obligations on the second defendant, and its guarantee provision contemplated a separate agreement between the claimant and a parent company. The clause therefore did not prevent the claimant and the second defendant from agreeing how the second defendant would provide comfort for the first defendant’s obligations, including through a collateral contract.

3. The question whether the parties intended to create legal relations was inherently unsuitable for summary judgment because it required assessment of the evidence. The claimant also had a real prospect of establishing that the alleged promise was an express offer in an ordinary commercial transaction, such that the burden concerning absence of legal intention might fall on the second defendant.

4. The absence of contemporaneous documents mentioning the collateral contract weakened the claimant’s case but was not conclusive. The significance of emails concerning a parent company guarantee likewise required evaluation of the witnesses’ evidence at trial.

5. The alleged promise was capable of amounting to an assumption of primary liability for operating expenses, rather than merely a guarantee of the first defendant’s contingent obligations. The writing requirement for contracts of guarantee therefore did not establish that the claim had no real prospect of success.